Suntech Leads Tumble on Plosser Growth Comments: China Overnight

Sept. 26 (Bloomberg) -- Chinese equities traded in New York
plunged and Suntech Power Holdings Co. fell the most in eight
weeks after a U.S. Federal Reserve official cast doubt on
whether the bank’s bond-buying program can boost growth.

The Bloomberg China-US Equity Index of the most-traded
Chinese companies in the U.S. lost 0.9 percent to 90.78
yesterday, erasing earlier gains of as much as 0.8 percent.
Suntech, the world’s largest solar-panel manufacturer, slid the
most since Aug. 1 while Bona Film Group Ltd., which counts News
Corp. as an investor, fell the most in a year. Semiconductor
Manufacturing International Corp. dropped to a seven-week low as
Taiwan Semiconductor Manufacturing Co. sold shares.

Federal Reserve Bank of Philadelphia President Charles
Plosser said yesterday that a third round of quantitative
easing, known as QE3, probably won’t boost growth or hiring.
Chinese ADRs rallied the most in a month on Sept. 13 after the
Fed said it will begin QE3 to bolster a recovery in the world’s
largest economy. Standard & Poor’s cut its outlook for China’s
economic expansion in 2012 by half a percentage point to 7.5
percent.

“We had an initial pop from QE3 but in truth the economic
numbers out of China have been fairly soft,” Derrick Irwin, who
helps manage $2.5 billion at the Wells Fargo Advantage Emerging
Markets Equity Fund, said in a phone interview yesterday from
Boston. “The uncertainty isn’t good for stocks.”

Labor Market

The Federal Open Market Committee said Sept. 13 it plans to
purchase mortgage-backed securities at a pace of $40 billion per
month until labor markets “improve substantially.” The FOMC
also said this month it will probably hold the federal funds
rate near zero at least through mid-2015 as the U.S. central
bank employs unconventional tools to attack a jobless rate stuck
above 8 percent since February 2009.

Suntech Power, which the New York Stock Exchange warned on
Sept. 21 that it may be delisted, retreated 8.9 percent to 92
cents. The average closing price of Suntech’s ADRs was below $1
for 30 consecutive days as of Sept. 10, the company said in a
statement, triggering a delisting warning.

Semiconductor Manufacturing fell for a second day, dropping
3.9 percent to $1.73 after Taiwan Semiconductor sold 190.8
million shares at an average price of HK$0.291, or four cents.

Early Gains

The Bloomberg China-US Equity Index gained in earlier
trading as a gauge for China’s economy compiled by the New York-based Conference Board climbed at the fastest pace in seven
months in August, according to a preliminary reading released
yesterday. China’s gross domestic product grew 7.6 percent in
the second quarter from a year earlier, the smallest expansion
in three years, as faltering growth in the U.S. and the European
debt crisis curb demand for the nation’s exports.

“China’s economy is not nearly as bad as people have
feared,” Jerome Booth, the London-based head of research at
Ashmore Investment Management, which oversees $63 billion of
emerging-markets assets, said by phone from London yesterday.
“In fact, China’s engineered shift from exports to a consumer-led economy is continuing apace, and so we’re seeing some better
data.”

China’s economy will expand faster than 7 percent for
several years, Commerce Minister Chen Deming said at an event in
Toronto hosted by the Canada China Business Council and the
Canada China Chamber of Commerce. Chen’s visit takes place as
the Canadian government reviews Beijing-based Cnooc Ltd.’s $15.1
billion bid for Calgary-based oil and gas producer Nexen Inc.

U.S. consumer confidence rose more than forecast in
September to a seven-month high while housing prices advanced in
July, reports issued yesterday showed.

Bona, Melco

American depositary receipts of Bona Film Group tumbled the
most since Oct. 4, dropping 9.5 percent to $4.95.

American depositary receipts of Hong Kong-based Melco Crown
gained for the first time in four days, adding 0.7 percent to
$12.79. JPMorgan Securities, in a Sept. 25 investor note led by
analyst Joseph Greff, said a rebound in the Macau gaming market
will “serve as a likely catalyst for positive estimate
revisions.”

Focus Media Holding Ltd., the Chinese advertising company
that may be acquired by a consortium that includes Carlyle Group
LP, climbed 1.9 percent to $23.35, the most since the company’s
board received a $27-per-share “going private” proposal on
Aug. 13. The acquisition of Shanghai-based Focus Media would
mark China’s largest leveraged buyout.